Save
Busy. Please wait.
Log in with Clever
or
show password
Forgot Password?
Don't have an account?  Sign up 
Sign up using Clever
or
Username is available taken
show password


Make sure to remember your password. If you forget it there is no way for StudyStack to send you a reset link. You would need to create a new account. Your email address is only used to allow you to reset your password. See our Privacy Policy and Terms of Service.

Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.
focusNode
Didn't know it?
click below
 
Knew it?
click below
Don't Know
Remaining cards (0)
Know
0:00
edit
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

  Normal Size     Small Size show me how

Allocation

2. How the market works and market failure

TermDefinition
Private Goods Scarce resources with an opportunity cost of consumption, normally provided by Private Sector, small external costs and benefits, no information failure, no government actions, no non-rival, marginal cost is not zero, and not non-excludable.
Free Goods Unlimited supply from nature, normally provided by nature, no external costs and benefits, no information failure, no government actions, non-rival, marginal cost is zero, and non-excludable.
Public Goods Goods that would not be provided by the private sector due to the ‘free rider problem’,no external costs and benefits, no information failure, government actions: direct provision, non-rival, marginal cost is zero, and non-excludable.
Merit Goods Consumers underestimate Private Benefits, likely benefits,(private benefits are underestimated), government actions: subsidies, legislation, direct provision, informative advertising, not non-rival, marginal cost is not zero, and not non-excludable.
Demerit Goods Consumers underestimate private cost, likely costs,(private costs are underestimate), government actions: taxation, legislation, complete ban, informative advertising, not non-rival, marginal cost is not zero, and not non-excludable.
Negative Externalities Goods with a significant external cost, private sector, external cost, information failure, government actions: taxation, legislation, complete ban, and informative advertising, not non-rival, marginal cost is not zero, and not non-excludable.
Positive Externalities Goods with a significant external benefit, private/public sector, external benefits, information failure, government actions: subsidies, legislation, direct provision, and informative advertising, rival, marginal cost is not zero, and not non-excludable.
Subsidy a payment to producers to reduce their costs of production, encourages them to increase market supply
Direct Provision directly providing the product, hence name
Legislation The process through which statutes are enacted by a legislative body
Informative Advertising advertising that is carried out in an informative manner, giving it more credibility
Taxation A means by which governments finance their expenditure by imposing charges on citizens and corporate entities
Complete Ban prohibiting the product’s manufacturing line especially by official decree
Price elastic supply Supply is highly price sensitive. A small percentage change in the price of a product will cause a far greater percentage change in the quantity supplied.
Price inelastic demand Demand is relatively price insensitive. A small percentage change in the price of the product will result in a smaller percentage change in the quantity demanded.
Price elasticity of demand The responsiveness of consumer demand for a product to a change in its price.
Price elasticity of supply The responsiveness of the supply of a product to a change in its price.
Perfectly Inelastic There is no response in Supply/Demand to a change in price.
Inelastic There is a less than proportional response in Supply/Demand to a change in price.
Unitary Changes are the same
Elastic There is a more than proportional response in Supply/Demand to a change in price.
Perfectly Elastic There is a definite response in Supply/Demand to a change in price. Producers are prepared to supply any amount at any given time.
P.E.D. Percentage Change in Demand/Percentage Change in Price
%change (difference/original)*100
Factors that affect Elasticity of Supply production time, stocks of the good, spare capacity, and spare factors of production to expand
Created by: deleted user
Popular Economics sets

 

 



Voices

Use these flashcards to help memorize information. Look at the large card and try to recall what is on the other side. Then click the card to flip it. If you knew the answer, click the green Know box. Otherwise, click the red Don't know box.

When you've placed seven or more cards in the Don't know box, click "retry" to try those cards again.

If you've accidentally put the card in the wrong box, just click on the card to take it out of the box.

You can also use your keyboard to move the cards as follows:

If you are logged in to your account, this website will remember which cards you know and don't know so that they are in the same box the next time you log in.

When you need a break, try one of the other activities listed below the flashcards like Matching, Snowman, or Hungry Bug. Although it may feel like you're playing a game, your brain is still making more connections with the information to help you out.

To see how well you know the information, try the Quiz or Test activity.

Pass complete!
"Know" box contains:
Time elapsed:
Retries:
restart all cards